: Demyelination of intact axons is an important factor contributing to lost function in most CNS disorders. These include spinal cord injury (SCI) and multiple sclerosis, where the capacity for native cell-mediated remyelination is limited. Embryonic stem (ES) cells provide a powerful tool to investigate mechanisms of myelination. ES cells provide an advantage over other cells because they can divide indefinitely, affording an unlimited source of stem cells for culture or transplantation. Furthermore, they are genetically normal, pluripotent, and the only stem cell amenable to double allele genetic manipulation. We propose to harness the potential of the ES cell system to evaluate mechanisms of myelination. We plan to explore the possibility that ES cells, induced by retinoic acid down a neuroglial differentiation pathway, can generate oligodendrocytes (oligos) capable of axonal myelination in vitro and in vivo. Additionally, we propose to determine if ES cells can differentiate into oligos and myelinate after transplantation into the demyelinated spinal cord. We hypothesize that enhancing ES cell-derived oligo (ESoligo) differentiation and myelination will optimize behavioral recovery after SCI. We plan to build upon our previous work that demonstrated ES cell differentiation into neural cells and a modest improvement in hindlimb locomotor function even when transplantation was delayed 9 days after moderate spinal cord contusion injury. In Aim 1, we propose to optimize ESoligo differentiation and to develop enriched sources of ESoligos for culture and transplantation in subsequent experiments. One major component of Aim I is development of a PLP-lacZ transgene ES cell line that will enable ESoligo derived myelin to be identified and quantified rapidly both in vitro and in vivo. In Aim 2 we will test several strategies (screened in Aim 1) for optimizing ESoligo survival and myelination, in 2 rodent models of spinal cord demyelination. In Aim 3, we will apply the results of both previous Aims to transplantation in the most clinically relevant (but complex) model of SCI, weight-drop contusion injury. We predict that improved myelination will enhance recovery of locomotion. Once recovery is optimized, the requirement of ESoligo myelination for maintenance of locomotor recovery will be tested. This will be done by selectively inducing myelin-producing ESoligos to undergo apoptotic death using a knocked-in bar-overexpression gene, driven by a myelin-specific PLP promotor. The long-term goal of this project is to develop the ES cell system as a research and therapeutic tool aimed at understanding the mechanisms of remyelination